Insurers Take on Victim Payouts in Supreme Court Bankruptcy Case

The Supreme Court on Tuesday will hear oral arguments in a dispute with significant implications for thousands of tort victims and hundreds of millions of dollars proposed settlements across several cases.

In Truck Insurance Exchange v. Kaiser Gypsum Co., the court will consider if insurers have a big enough stake in bankruptcy plans to challenge them. Insurers in many bankruptcies are kept at arm’s length, barred from objecting to a reorganization plan unless they are specifically affected by it.

Truck Insurance Exchange, which lost appeals at the district and circuit levels, says it should be allowed to object to ...